EXECUTION COPY
TRANSITION SERVICES AGREEMENT
BETWEEN
DREYER'S GRAND ICE CREAM, INC.
AND
INTEGRATED BRANDS, INC.
DATED AS OF JULY 5, 2003
This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of
July 5, 2003, is by and between Xxxxxx'x Grand Ice Cream, Inc., a Delaware
corporation ("Dreyer's"), and Integrated Brands, Inc., a New Jersey corporation
("Integrated Brands").
WHEREAS, Dreyer's, New December, Inc., a Delaware corporation, Nestle
Ice Cream Company, LLC, a Delaware limited liability company ("NICC"), and
Integrated Brands have entered into an Amended and Restated Asset Purchase and
Sale Agreement, as amended and restated on June 4, 2003 (the "Asset Sale
Agreement"), pursuant to which, among other things, Integrated Brands shall
purchase from Dreyer's and NICC, and Dreyer's and NICC shall sell, or cause to
be sold, subject to the terms and conditions thereof, the Ice Cream Assets (as
defined in the Asset Sale Agreement) and the Distribution Assets (as defined in
the Asset Sale Agreement); and
WHEREAS, in connection with the Asset Sale Agreement, Integrated
Brands desires that Dreyer's provide, or cause to be provided, to Integrated
Brands, and Dreyer's is willing to provide, or cause to be provided, to
Integrated Brands, certain transition services following the closing of the
transactions contemplated by the Asset Sale Agreement, on the terms and
conditions set forth herein; and
WHEREAS, as an essential part of the transactions contemplated by the
Asset Sale Agreement, Dreyer's has agreed to provide, or cause to be provided,
such transition services to Integrated Brands to facilitate Integrated Brands'
acquisition of the Ice Cream Assets and the Distribution Assets; and
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Agreement to Provide Services.
1.1 Agreement. Upon the terms and subject to the conditions contained
herein and in Exhibit A attached hereto, Dreyer's hereby agrees to provide, or
cause its Affiliates (as defined in the Asset Sale Agreement) to provide, to
Integrated Brands the Transition Services (as defined herein), and Integrated
Brands agrees to pay Dreyer's the Service Costs (as defined herein) for such
Transition Services.
1.2 Transition Services. In this Agreement, the term "Transition
Services" shall mean and refer to the services relating to the Ice Cream Assets
and the Distribution Assets and as more fully described on Exhibit A and Exhibit
B (as such Exhibits may be amended or modified from time to time as provided
herein). If Integrated Brands desires Dreyer's to provide a service not
described on Exhibit A or Exhibit B, Integrated Brands shall provide Dreyer's
written notice thereof at least ten (10) days prior to the date that Integrated
Brands desires such service to begin, and Dreyer's and Integrated Brands shall
cooperate and use reasonable best efforts to reach a mutual written agreement
with respect to the provision of such service and the terms and conditions
related thereto within such 10-day period.
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1.3 Transition Period. Dreyer's shall provide the Transition Services
to Integrated Brands during the periods (each, a "Transition Period") that shall
commence on the Closing Date (as defined in the Asset Sale Agreement) and shall,
with respect to each Transition Service, continue for the period of time shown
on Exhibit A or Exhibit B or otherwise agreed to in writing by the parties for
such Transition Service, unless earlier terminated in accordance with Section
1.4. In the event that Integrated Brands reasonably requires any particular
Transition Service beyond the Transition Period specified in Exhibit A or
Exhibit B, Dreyer's shall, if requested by Integrated Brands, continue to
provide such Transition Service for a reasonable period of time after the
applicable Transition Period specified therein so long as Integrated Brands is
using its reasonable best efforts to end its need for such Transition Service as
promptly as practicable after expiration of such Transition Period.
1.4 Phase-Out or Termination of Transition Services.
(a) Integrated Brands shall have the unconditional right, in its sole
and absolute discretion, to direct that any or all of the Transition Services be
terminated effective on a date established by Integrated Brands ("Early
Termination") that is prior to the termination date for such Transition Services
set forth on Exhibit A or Exhibit B. Any such Early Termination shall be final,
and the amounts payable by Integrated Brands hereunder with respect to such
terminated Transition Services will be appropriately prorated on a daily basis
for any partial month based on the actual number of days in such month.
Integrated Brands may request that the level of any specific item of the
Transition Services be reduced or phased out, subject to mutual written
agreement of the parties.
(b) This Agreement may be terminated as follows: (i) by either party
hereto immediately in the event the other party has been adjudicated bankrupt,
has failed to vacate an involuntary bankruptcy or reorganization petition within
thirty (30) days of the date of such filing, files such a petition on a
voluntary basis, fails to vacate the appointment of a receiver or trustee for
the other party or for a substantial portion of its assets, makes an assignment
for the benefit of such other party's creditors or ceases to do business as a
going concern, or (ii) by Integrated Brands upon written notice to Dreyer's in
the event that Dreyer's breaches any material term of this Agreement if Dreyer's
fails to remedy such breach within the cure period set forth in Section 7.1
hereof.
2. Payment for Transition Services.
2.1 Service Costs. In consideration for Dreyer's provision of the
Transition Services, Integrated Brands will reimburse Dreyer's for Dreyer's
"Service Costs", which shall be determined in accordance with Exhibit A and
shall consist of the following, to the extent identified on Exhibit A: (a)
Dreyer's cost for [ORIGINAL TEXT REDACTED] providing the Transition Services at
a rate equal to the [ORIGINAL TEXT REDACTED] in providing such services at
[ORIGINAL TEXT REDACTED] rate based on each such [ORIGINAL TEXT REDACTED], and
(b) Dreyer's [ORIGINAL TEXT REDACTED] incurred by Dreyer's in connection with
providing, or in order to provide or cause to be provided to Integrated Brands,
Transition Services (the "Reimbursable Expenses"); provided that in no event
shall Service Costs include any cost, expense, fee, charge or other amount (i)
with respect to any item, service, property or other matter for which Integrated
Brands is otherwise obligated to pay under the
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Asset Sale Agreement or the Collateral Agreements (other than this Agreement, as
defined in the Asset Sale Agreement), or (ii) relating to any obligation,
covenant or agreement of Dreyer's or any of its Affiliates pursuant to the Asset
Sale Agreement or the Collateral Agreements (other than this Agreement) for
which Dreyer's or its Affiliates is obligated to pay under such agreement.
Dreyer's shall use reasonable best efforts to provide Integrated Brands at least
thirty (30) days' written notice in the event that any Reimbursable Expenses
shall increase materially above the amounts paid by Dreyer's in connection with
the Ice Cream Assets immediately prior to the Closing (as defined in the Asset
Sale Agreement).
2.2 Reimbursement of Service Costs. Dreyer's shall invoice Integrated
Brands for Service Costs promptly after the end of each calendar quarter during
the Transition Period. Such invoices shall set forth in reasonable detail the
Transition Services provided during such quarter and the Service Costs payable
by Integrated Brands therefor. All invoices shall be paid not later than thirty
(30) calendar days following receipt by Integrated Brands of Dreyer's invoice in
accordance with the written instructions provided by Dreyer's to Integrated
Brands; provided that no such payment by Integrated Brands shall be deemed to be
a waiver by Integrated Brands of its rights under Section 2.3. This Section 2.2
shall survive any termination of this Agreement with respect to Transition
Services performed pursuant to this Agreement for which Dreyer's has not yet
been reimbursed by Integrated Brands.
2.3 Audits; Objections. Integrated Brands shall have the right, upon
reasonable written notice and at Integrated Brands' expense, to review the
applicable books and records of Dreyer's and its Affiliates with respect to
Dreyer's obligations under this Agreement and to confer with employees of
Dreyer's and such Affiliates to review the accuracy of any of the invoices
provided to Integrated Brands hereunder (during business hours and without
unreasonably disrupting Dreyer's or such Affiliates' normal operations). In the
event that Integrated Brands disputes any such invoice or the amount of any such
remittances, Integrated Brands shall notify Dreyer's in writing of its
objections, and Integrated Brands and Dreyer's shall negotiate in good faith to
attempt to resolve such dispute.
3. Service Standards; Disclaimer of Warranties; Scope of Services.
(a) As a general principle, Dreyer's shall, and shall cause its
Affiliates to, perform the Transition Services with substantially the same
degree of care, skill, diligence and compliance with applicable law and in
substantially the same manner as corresponding services were provided to or on
behalf of Dreyer's with respect to the Ice Cream Assets immediately prior to the
Closing. Subject to the foregoing, Dreyer's and its Affiliates shall not be in
breach of this Agreement or have any liability of any nature whatsoever to
Integrated Brands in connection with the performance of this Agreement, and
Integrated Brands shall be solely responsible for all losses, damages, costs and
expenses of whatever nature incurred by Integrated Brands in connection with the
performance of this Agreement by Dreyer's and its Affiliates, except to the
extent that such losses, damages, costs and expenses are attributable to
negligence or willful misconduct on the part of Dreyer's, its Affiliates or any
of their respective employees, directors, contractors or other representatives.
(b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THERE ARE NO OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESS OR
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IMPLIED, MADE OR GIVEN BY EITHER PARTY HEREUNDER, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
TRANSITION SERVICES PROVIDED HEREUNDER.
(c) The Transition Services shall be provided only in connection with
the Ice Cream Assets and the Distribution Assets and not to any other business
of Integrated Brands or its Affiliates.
4. Force Majeure. Neither party shall be liable for any failure of
performance attributable to acts, events or causes (including, but not limited
to, war, terrorism, riot, rebellion, civil disturbances, power failures, failure
of telephone lines and equipment, flood, storm, fire and earthquake or other
acts, conditions or events of nature, or any law, order, proclamation,
regulation, ordinance, demand or requirement of any Governmental Entity (as
defined in the Asset Sale Agreement), or any strike, lockout, work stoppage or
other labor action) beyond its control that prevent, in whole or in part,
performance by such party hereunder. The party so unable to perform shall
promptly notify the other party of its inability to perform. The affected
provisions and/or other requirements of this Agreement shall be suspended during
the period of such disability and Dreyer's shall have no liability to Integrated
Brands or any other party in connection therewith other than by reason of breach
or nonfulfillment of its covenants in this Section 4. Dreyer's shall make all
reasonable best efforts to remove such disability as soon as and to the extent
reasonably possible and to assist Integrated Brands in finding third parties to
provide affected Transition Services.
5. Access to Coordinator. At Integrated Brands' request, Dreyer's
shall make reasonable best efforts to provide Integrated Brands, shortly after
such request, with access to the employees of Dreyer's with responsibility for
coordinating the Transition Services hereunder.
6. Indemnification. Dreyer's shall indemnify, defend and hold harmless
Integrated Brands, CoolBrands International. its Affiliates, their officers,
directors, employees, agents and representatives from and against any and all
losses, liabilities, claims, damages, actions, fines, penalties, expenses or
costs (including court costs and reasonable attorneys' fees) ("Losses") arising
out of (i) the negligence or willful misconduct of Dreyer's, its Affiliates or
their respective employees, directors, contractors or other representatives in
providing the Transition Services, or (ii) a breach of the terms or conditions
of this Agreement (other than a breach in respect of providing the Transition
Services). Integrated Brands shall indemnify, defend and hold harmless Dreyer's,
Nestle USA, Inc., and their Affiliates, their officers, directors, employees,
agents and representatives from and against any and all Losses arising out of
(x) the negligence or willful misconduct of Integrated Brands, its Affiliates or
their respective employees, directors, contractors or other representatives in
connection with the Transition Services or (y) any breach by Integrated Brands
of any term or condition of this Agreement. Notwithstanding any other provision
of this Agreement, neither party shall be liable for lost profit, lost revenue
or any other form of indirect, incidental, special, consequential or punitive
damages, even if that party has been informed of the possibility of such
damages. The indemnities under this Section 6 shall be the sole and exclusive
remedy available to each party hereunder, except in case of willful misconduct
by a party or its Affiliates.
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7. General Provisions.
7.1 Notice of Breach. In the event of a material breach of this
Agreement by a party, the party claiming the breach shall give notice of such
breach (in accordance with Section 7.2 hereof) to the other party, which party
shall have forty-five (45) calendar days to cure such breach. In the event that
the party claiming the breach is Integrated Brands, Integrated Brands shall also
give notice of such breach to Nestle Holdings, Inc., a Delaware corporation, in
accordance with Section 7.2 hereof. In the event of such cure within such 45-day
period, such notice of breach shall be deemed rescinded. Either party's failure
to send a notice of breach or to pursue legal remedies available to it shall not
constitute or be construed as a waiver or acquiescence, and each party expressly
reserves the right to subsequently pursue such remedies for the same or any
other breach, either of the same or different character.
7.2 Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by postage prepaid, registered, certified or express mail or by reputable
overnight courier service and shall be deemed given when delivered by hand,
three days after mailing (one (1) Business Day (as defined in the Asset Sale
Agreement) in the case of guaranteed overnight express mail or guaranteed
overnight courier service), as follows (or at such other address for a party as
shall be specified by like notice):
(i) If to Dreyer's or New Dreyer's:
Xxxxxx'x Grand Ice Cream, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
(ii) If to Integrated Brands:
Integrated Brands, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, Co-Chief Executive Officer
with a copy to:
Xxxxxxx Procter LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx, Esq.
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(iii) If to Nestle Holdings, Inc.:
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
000 Xxxxx Xxxxx Xxxxxxxxx.
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
with a copy to:
Howrey, Xxxxx, Xxxxxx & White LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
In the event that Integrated Brands gives notice regarding any breach or
violation of this Agreement by Dreyer's, Integrated Brands should also
concurrently provide a copy of such notice to Nestle Holdings, Inc.
7.3 Assignment; Successors and Assigns. Except as set forth below,
this Agreement and the rights and obligations hereunder shall not be assigned or
transferred in whole or in part by Integrated Brands or Dreyer's without the
prior written consent of the other party hereto. Integrated Brands may assign or
delegate its rights, obligations or liabilities under this Agreement in whole or
in part to one or more Affiliates of Integrated Brands or to the lender or
lenders providing to it the financing to consummate the transactions
contemplated by the Asset Sale Agreement, in each case without Dreyer's consent
(provided that a pledge of Integrated Brands' rights, obligations or liabilities
under this Agreement to such lender or lenders shall not constitute an
assignment hereunder until such time as any such lender exercises its rights
under the pledge agreement or other applicable agreement or document); provided,
however, that in any such event, Integrated Brands shall remain fully liable for
the fulfillment of all its obligations hereunder. Dreyer's may not assign but
may delegate its rights, obligations or liabilities under this Agreement in
whole or in part to one or more Affiliates of Dreyer's; provided that, in any
such event, Dreyer's shall remain fully liable for the fulfillment of all of its
obligations hereunder. Any attempted assignment or delegation in contravention
hereof shall be null and void. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto.
7.4 No Third-Party Beneficiaries. Except for persons entitled to
indemnification under Section 6 hereof, this Agreement is for the sole benefit
of the parties hereto, and nothing herein express or implied shall give or be
construed to give to any person or entity, other than the parties hereto, any
legal or equitable rights hereunder.
7.5 Remedies. Nothing contained herein shall be deemed to be a
limitation on any remedies that may be available to any party under the Asset
Sale Agreement or any other Collateral Agreement.
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7.6 Interpretation; Definitions. The headings contained in this
Agreement or in any Schedule hereto are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. The terms
defined in the singular shall have a comparable meaning when used in the plural,
and vice versa. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted. When a reference is made in
this Agreement to Articles, Sections or Exhibits, such reference shall be to an
Article or Section of or Exhibit to this Agreement unless otherwise indicated.
All references in this Agreement to Dreyer's shall include Dreyer's Affiliates,
as and to the extent applicable. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The phrases "the date of this Agreement," "the
date hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to the date set forth in the first paragraph of this
Agreement. The words "hereof," "hereby," "herein," "hereunder" and similar terms
in this Agreement shall refer to this Agreement as a whole (including the
Exhibits) and not to any particular Section in which such words appear. All
references herein to dollar amounts shall be deemed to be references to U.S.
Dollars.
7.7 Amendments. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by each party hereto.
7.8 Counterparts. This Agreement and any amendments hereto may be
executed by facsimile and in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to
the other party.
7.9 Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.
7.10 Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
without regard to the choice-of-law principles of such state. Each party hereby
waives to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect to any litigation directly or indirectly arising
out of, under, or in connection with this Agreement or the transactions
contemplated hereby or disputes relating hereto.
7.11 Actions and Proceedings. Dreyer's and its Affiliates and
Integrated Brands hereby irrevocably consent to the exclusive jurisdiction and
venue of the courts of the State of New York and the United States District
Court for the Southern District of New York in connection with any action or
proceeding arising out of this Agreement or any related transaction. Integrated
Brands irrevocably appoints Integrated Brands' Co-Chief Executive Officer as its
authorized agent upon whom process may be served in any such action or
proceeding instituted in any such court and waives any objections to personal
jurisdiction with respect thereto. Dreyer's and its Affiliates hereby appoint
Dreyer's General Counsel as their
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authorized agent upon whom process may be served in any such action or
proceeding instituted in any such court and waive any objections to personal
jurisdiction with respect thereto.
7.12 Waiver. Except as otherwise provided in this Agreement, any
failure of either of the parties hereto to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Any consent given
by any party pursuant to this Agreement shall be valid only if contained in a
written consent signed by such party.
7.13 Mutual Confidentiality Covenants.
7.13.1 Obligation. Both parties shall keep confidential and shall not
cause or permit the disclosure to any third party of any confidential
information disclosed by either party pursuant to this Agreement. Dreyer's shall
disclose Integrated Brands' confidential information only to those Persons who
require such information for the purpose of performing the Collateral Agreements
and shall use such information solely for the purpose of performing its
obligations under the Collateral Agreements. Confidential information may
include, but is not limited to, formulas, production processes, research,
marketing and sales information. Said confidentiality requirement shall not
apply to any information which (i) has entered into the public domain through no
wrongful act or breach of any obligation of confidentiality on the receiving
party's or any third party's part; (ii) was in the lawful knowledge and
possession of, or was independently developed by, the receiving party prior to
the time it was disclosed to, or learned by, the receiving party as evidenced by
written records kept in the ordinary course of business by the receiving party,
except this Section 7.13.1 will not apply to Dreyer's with respect to
information relating to the Ice Cream Assets and the Distribution Assets all of
which shall remain subject to the restrictions notwithstanding Sellers'
Knowledge (as defined in the Asset Sale Agreement); (iii) was rightfully
received from a third party not in violation of any contractual, legal or
fiduciary obligation of such third party; or (iv) was approved for release by
written authorization by the party having rights in such information.
7.13.2 Compelled Disclosure. In the event that a party is required by
law or court order or stock exchange to disclose any confidential information of
the other party, that party shall (i) notify the other party in writing as soon
as possible, but in no event less than ten (10) calendar days prior to any such
disclosure; (ii) cooperate with the other party to preserve the confidentiality
of such confidential information consistent with applicable law; and (iii) use
its best efforts to limit any such disclosure to the minimum disclosure
necessary to comply with such law or court order.
7.14 Authority. Neither of the parties hereto shall act or represent
or hold itself out as having authority to act as an agent or partner of the
other party, or in any way bind or commit the other party to any obligations.
Nothing contained in this Agreement shall be construed as creating a
partnership, joint venture, agency, trust or other association of any kind, each
party being individually responsible only for its obligations as set forth in
this Agreement.
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7.15 Term of Agreement. Unless terminated earlier pursuant to Section
1.4 hereof, this Agreement will terminate and be of no further force or effect
immediately as of the time and date that the last remaining Transition Period
(as such Transition Period may have been extended pursuant hereto) shall have
either expired or been terminated; provided that upon termination or expiration
of this Agreement, (i) neither party hereto shall be relieved of any liability
for any breach or nonfulfillment of any provision of this Agreement and (ii)
Section 6 and Sections 7.2 and 7.13 will survive any termination or expiration
of this Agreement. The amounts that Integrated Brands is obligated to pay on a
quarterly basis pursuant to Section 2 will be prorated on a daily basis for any
partial month of the term of this Agreement.
7.16 Exhibits. All Exhibits annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein.
7.17 Entire Agreement. This Agreement (including the Exhibits hereto),
the Asset Sale Agreement and the other Collateral Agreements contain the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings,
whether written or oral, relating to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
XXXXXX'X GRAND ICE CREAM, INC.
By: /s/ T. Xxxx Xxxxxx
--------------------------------------
T. Xxxx Xxxxxx
Chairman of the Board of Directors and
Chief Executive Officer
INTEGRATED BRANDS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
Co-Chief Executive Officer
[Signature Page to Transition Services Agreement]
Exhibit A
Transition Services
ORIGINAL TEXT REDACTED
Exhibit A to Transition Services Agreement
Exhibit B
Computer and Accounting Services
ORIGINAL TEXT REDACTED
Exhibit B to Transition Services Agreement
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